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Warner Music is no longer a Spotify shareholder 

By | Published on Wednesday 8 August 2018

Warner Music

Warner Music has now sold off all of its Spotify equity realising $504 million in the process. The mini-major previously confirmed it had offloaded 75% of the shares it held in Spotify within a month of the streaming firm listing on the New York Stock Exchange back in April. In an earnings call yesterday Warner confirmed it had now sold off the rest of its Spotify stock.

With all this share-sale loot now flowing into the music industry, more savvy artist managers are keeping a close eye on upcoming royalty statements to see how different labels make good on their past commitments to share this income with artists. Record companies secured stock as part of their original licensing deals with Spotify. And artists and indies distributed by the majors have long argued that they should share in the profit of any equity sale, given the record companies secured those shares on the back of the value of their recordings.

Although Warner was the first major to commit to share Spotify equity profits with artists – and CEO Stephen Cooper said yesterday that $126 million had been “credited to artist accounts” in the next round of royalty statements – Sony Music has scored some PR wins in the way it is sharing its Spotify loot.

First, Sony has made a wider commitment to share its Spotify stock profits with distributed indie labels, whereas Warner only committed to do this where such an arrangement was “included in [the label’s] agreements with us”. Second, Sony said artists would receive their Spotify equity boost even where the label was still recouping past investments, which isn’t a commitment as yet made by Warner HQ.

But why the urgency in cashing in the stock? When Warner announced its initial offload of Spotify shares back in May it insisted that this wasn’t because of any concerns about the long-term future of the currently loss-making market-leading streaming music business. “We’re hugely optimistic about the growth of subscription streaming”, it said, “[but] we’re a music company, and not, by our nature, long-term holders of publicly traded equity”.

Yesterday Cooper again talked optimistically about the booming but mainly loss-making (for the services) streaming music sector, also noting the rise of Amazon in this space, YouTube’s move into premium music content and Facebook’s first proper musical dabblings.

According to Variety, Cooper said: “While Apple and Spotify continue to grow their global subscriber numbers, Amazon and YouTube are both off to a great start with their premium services. This increased competition is good news for our business, and we’re happy to see other large tech companies, such as Facebook, begin to recognise the true value that music brings to their platforms”.

For those wondering, CMU is still a Spotify shareholder. We’re in it for the long-haul. Our single share is now worth $179.52, a whole $24.35 more than we paid for it. Party time!



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